Q3 2024 Simply Good Foods Co Earnings Call Transcript
Key Points
- The Simply Good Foods Co (SMPL) reported fiscal third-quarter financial results that were slightly better than estimates.
- Quest brand showed strong growth, particularly in salty snacks, with retail takeaway increasing by 13.5%.
- Gross margin improved to 39.9%, a 320-basis-point increase from the previous year, primarily due to lower ingredient and packaging costs.
- The OWYN acquisition is tracking well, with expected net sales for Q4 in the $25 million to $30 million range.
- E-commerce growth for both Quest and Atkins brands continued to be solid, contributing positively to overall performance.
- Atkins brand performance was down, with retail takeaway in the IRI MULO + C-store universe and combined measured and unmeasured channels off by 9% and 5%, respectively.
- International net sales declined by 2.4% compared to the previous year.
- Input cost inflation, particularly in cocoa, is expected to be a headwind in fiscal 2025, potentially leading to gross margin compression.
- The company anticipates a short-term sales impact from reducing low ROI trade and marketing investments in the Atkins brand.
- Adjusted EBITDA growth for Q4 is expected to be negligible due to the OWYN acquisition.
Greetings and welcome to The Simply Good Foods Company Fiscal Third Quarter 2024 Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.
I would now like to turn the conference over to your host, Mr. Mark Pogharian, Vice President of Investor Relations for The Simply Good Foods Company. Thank you, sir. You may begin.
Thank you, operator. Good morning. I'm pleased to welcome you to The Simply Good Foods Company earnings call for the fiscal third quarter ended May 25, 2024. Geoff Tanner, President and CEO; and Shaun Mara, CFO, will provide you with an overview of results, which will then be followed by a Q&A session.
The company issued its earnings release this morning at approximately 07:00 AM Eastern Time. A copy of the release and accompanying presentation are available under the Investors section of the company's website at
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